Date du colloque

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URI

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Métadonnées

Auteur

Riva, Fabrice

Ginglinger, Edith

Koenig-Matsoukis, Laure

Type

Communication / Conférence

Nombre de pages du document

28

Résumé en anglais

This paper contributes to the resolution of the rights offer paradox, using a database of French
SEOs. We first document higher direct flotation costs, but also improved stock market
liquidity after public offerings and standby rights relative to uninsured rights. We find that
blockholder renouncements to subscribe to new shares and stock market liquidity are
important determinants of flotation method choice. After controlling for endogeneity in the
choice of flotation method, we find that public offerings are cost effective and more liquidity
improving than standby rights whereas an uninsured rights offering is the best choice for low
liquidity, closely held firms. Our results provide new insights as to why firms choose public
offerings despite apparently higher costs.